Chennai: The recent merger decision of two leading Indian software majors, Polaris and Oribitech, in an all stock deal apparently signals the birth of an Indian multinational in the global IT horizon notwithstanding apprehensions as to whether this would actually set the tone of future consolidations in the Indian IT arena.

"Much depends on how the merger works out and how the merged entity fares in the highly competitive global it market in the coming days" industry experts say.

Even Polaris CEO, Arun Jain admits that the type of merger decided by the two companies has no precedents in India, indicating that the step is an experiment in consolidation in the IT sector.

However, according to Jain such mergers started in countries like ours 30 years ago whereas Indian corporates still hold family-run business in high esteem as the best model.

The top brass of the two companies also admit that the most critical challenge would be integrating the workforce, which would be to the tune of 3800 in the merged entity comprising 2544 in the rolls of Polaris and 1256 in the rolls of Orbitech.

Meanwhile, at least 500 contract employees in Orbitech hired from other IT firms are likely to face an uncertain future as the merged entity would not require them in due course and they may not find a placement in their parent firms in the current 'overstaffed environment', according to market analysts.

PTI